Bearish View Ahead of a Busy UK, US Ne

The GBP/USD pair has been in a downward trend after peaking at 1.3140 in July.

• Sell the GBP/USD pair and set a take-profit at 1.2600.
• Add a stop-loss at 1.2775.
• Timeline: 1-2 days.

• Set a buy-stop at 1.2730 and a take-profit at 1.2830.
• Add a stop-loss at 1.2650.

The GBP/USD exchange rate was little changed on Monday morning as traders positioned for a relatively busy week in the market. The pair was consolidating at 1.2695, lower than last week’s high of 1.2815.

The GBP/USD pair reacted mildly to Friday’s positive UK GDP numbers. The data revealed that the country’s economy eked a small gain in the second quarter. It expanded by 0.2% in Q2, helped by activities of King Charle’s coronation. Analysts believe that this growth could stall in the second half of the year.

There will be no important UK economic numbers on Monday. Therefore, traders will focus on the upcoming UK employment and inflation numbers set for Tuesday and Wednesday, respectively. These numbers will provide more information on what to expect from the Bank of England (BoE).

Economists expect the data to show that the unemployment rate emained at 4.0% in June as the economy added over 50k jobs in three months to July. Like in other developed countries, the UK is facing some significant labor shortages.

The UK will publish the July consumer and producer inflation data on Wednesday. Economists polled by Reuters believe that the headline consumer inflation dropped by 0.5% in July, leading to a YoY increase of 6.8%. On the other hand, they expect that core inflation jumped to 7.4% in July.

The other important movers for the GBP/USD pair will be the upcoming US retail sales data and FOMC minutes. Expectations are that retail sales rose in July as inflation dropped slightly in July. The Fed will publish minutes of the last meeting, which will provide more color about the next decision.

The GBP/USD pair has been in a downward trend after peaking at 1.3140 in July. It has remained below the 25-day and 50-day moving averages and the 50% Fibonacci Retracement level. The pair has found strong support at 1.2667, the lowest point on August 3rd.

Therefore, the outlook for the pair is bearish if bears manage to cross the support at 1.2667. If this happens, the next support level to watch will be the psychological point at 1.2600

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